In response to the German economic ministry noting production dropped 0.6 percent during the month of November, crude oil futures fell 1.4 percent. As the host of the embattled euro zone's largest economic system, the nation is spearheading the effort to preserve the integrity of the common currency of the European Union.
Angela Merkel, chancellor of Germany, and French President Nicolas Sarkozy were scheduled to convene Monday in Berlin to discuss strategies of sustaining the strength and relevancy of the monetary unit as France's economic system runs second to that of Germany. The two nations typically assume a leading roll for topics economic in the euro zone.
"The European economy doesn't look good and that's going to hurt oil demand," research director Kyle Cooper with IAF Advisors in Houston told Bloomberg. "Although the U.S. economy is performing better, petroleum demand isn't looking good."
At 2:09 p.m. on Monday, crude oil futures fell 0.17 percent, a 19 cent slip to $112.87 per barrel.
Also impacting the price of oil is the ongoing standoff with Iran, one of the globe's major suppliers of the energy commodity. But the Middle Eastern nation has become increasingly isolated as it pursues a nuclear program that many nations fear could be used for military purposes.
Preoccupations waned about the likelihood of Iran restricting exports of crude oil from Persian Gulf nations via the Strait of Hormuz. However, Societe Generale said crude oil futures could skyrocket as high as $200 per barrel should Iran close the strait for the shipment of the energy commodity.
But should the supply of oil from Iran be reduced, European nations are poised to look for compensation from Saudi Arabia, the globe's top manufacturer of the energy commodity. Commodities research head Jeffrey Currie with Goldman Sachs said Iran's oil will go to China, the destination of the strongest demand.
"Geopolitics have trumped market fundamentals lately," principal Rick Mueller with ESAI Energy in Massachusetts told Bloomberg. "Prices will fall a great deal when the Iran situation calms down."
Jim Ritterbusch, the namesake of Ritterbusch & Associates, told Dow Jones Newswires that the likelihood of crude oil futures climbing higher than $105 per barrel is slim and the dilemma with Iran is attracting significant attention.
"We have difficulty constructing a price scenario that would carry WTI values much above $105 a barrel or Brent significantly above the $115 area," Ritterbusch told the publication. "In the meantime, we look for the Iran factor to preclude aggressive selling rather than induce additional speculative buying."
UPI reports the energy commodity continued gleaning support from this past Friday's jobs report from the U.S. Labor Department, which noted the globe's largest economy created an additional 200,000 jobs last month. In turn, that pulled down the unemployment rate to 8.5 percent.
The energy commodity is one pick that investment house Goldman Sachs is closely watching this year and projected to perform strongly, according to Reuters.
The investment house noted the drivers include what will happen with the situation created by Iran.
Production of oil from Libya increased roughly 100,000 barrels per day to amount to 700,000 per day last month, according to Bloomberg. That total marks the highest level of production for the North African nation since February, according to a Bloomberg poll of industry companies, producers and analysts.
February in Libya was prior to the manifestation of anti-government uprisings that ultimately resulted in the deposing and murder of long-time autocrat Muammar Gadhafi.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.